What is the value of the government spending multiplier if marginal propensity to consume is 0.6? A)0.1333 B)0.4 C)1.333 D)2.5

adjectivamr0g

adjectivamr0g

Answered question

2023-02-21

What is the value of the government spending multiplier if marginal propensity to consume is 0.6?
A)0.1333
B)0.4
C)1.333
D)2.5

Answer & Explanation

Haylie Long

Haylie Long

Beginner2023-02-22Added 7 answers

The correct option is B 2.5

The multiplier is given by 1(1−c).
So, when c = 0.6, the multiplier is 2.5.


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